Microsoft backs down to consumer pressure

Microsoft has relented on the deadline for its unpopular licensing changes, pushing it back from October to July the 31st of next year.

Microsoft has relented on the deadline for its unpopular licensing changes, pushing it back from October to July the 31st of next year. ITP.net previously reported that the company had surreptitiously changed the rules for licensing its software on October the 1st in conjunction with another sweeping licensing revision which, according to research firm Gartner, raised software costs for many customers by up to 100 per cent.

“Customers have told us that Licensing 6.0, our improved licensing program, which we launched on Oct. 1, 2001, is a significant change, but that our original five-month transition period was just not long enough,” said Bill Landefeld, vice president for worldwide licensing and pricing at Microsoft. “Given the economic climate today, it's clear our customers were right. After listening to customers, Microsoft is extending the launch transition period to allow customers sufficient time to review their existing licenses, evaluate the new options and decide how to take advantage of Software Assurance.”

Under the old licensing system, Microsoft could force customers buying PCs installed with Windows 98, NT or 2000 to pay for a second copy of the operating system. To more efficiently manage their systems, many companies erase the copy of Windows installed on their PCs and replace the OS with an identical version that also includes the appropriate hardware drivers and software applications for their work environment and corporate network. However, the company began telling companies in the US that the practice, known as “reimaging” violated their licensing agreements, Microsoft’s solution: pay twice for Windows.

“The message here is that customer pressure works and the (United States) government scrutiny helped,” commented Gartner analyst Neil MacDonald.

Ashim Pal of the Meta Group recently commented that the changes “effectively mean that companies that don’t have any agreement and don’t have any discussion will have to re-buy all of their software to be eligible for the new licensing arrangement.”

The most recent licensing changes saw the company do away with version upgrades, which was the most popular way for many Microsoft customers to buy new copies of Microsoft software. The licensing option also let companies choose when they wanted to upgrade. The company replaced that option with a new programme, Software Assurance, which is essentially a two year maintenance programme companies pay for annually.